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Richardson Electronics (RELL) Gains But Lags Market: What You Should Know

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Richardson Electronics (RELL - Free Report) closed the most recent trading day at $25.50, moving +0.59% from the previous trading session. This change lagged the S&P 500's 1.43% gain on the day. At the same time, the Dow added 1.58%, and the tech-heavy Nasdaq gained 0.03%.

Coming into today, shares of the electronic components and communication products company had gained 12.67% in the past month. In that same time, the Computer and Technology sector gained 8.36%, while the S&P 500 gained 5.12%.

Wall Street will be looking for positivity from Richardson Electronics as it approaches its next earnings report date. In that report, analysts expect Richardson Electronics to post earnings of $0.29 per share. This would mark a year-over-year decline of 3.33%. Meanwhile, our latest consensus estimate is calling for revenue of $64.5 million, up 19.49% from the prior-year quarter.

RELL's full-year Zacks Consensus Estimates are calling for earnings of $1.31 per share and revenue of $260 million. These results would represent year-over-year changes of +28.43% and +15.75%, respectively.

Investors should also note any recent changes to analyst estimates for Richardson Electronics. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Richardson Electronics is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, Richardson Electronics is currently trading at a Forward P/E ratio of 19.35. Its industry sports an average Forward P/E of 6.85, so we one might conclude that Richardson Electronics is trading at a premium comparatively.

Meanwhile, RELL's PEG ratio is currently 0.97. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. RELL's industry had an average PEG ratio of 0.86 as of yesterday's close.

The Electronics - Parts Distribution industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 46, which puts it in the top 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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